So instead of replying to Steve via 140 characters, I figured I’d do a blog response.

Steve poses this hypothesis and question:

If I try to push improvements on people then they will tend to resist the change. However, if I try to pull improvements from them (ask them what they want to learn/improve) I encounter much less resistance and more actual improvements. How might this influence the annual performance review process?

Steve then details an experiment he performed, reviews the result, and then comes up with some final thoughts where he states:

After reading this some of you may be asking questions like "how does this help us address those individuals that actually have 'performance' problems?", or "how does this help us set salary?". I'm not sure it does. … However, I'd guess that taking this approach nudges a group of people toward being a more effective team, and a more effective organization.

Now my initial Tweet response was more to Steve’s title which suggested that “Systems Thinking” was an alternate to Performance Reviews. In reading his full blog, I don’t think he ever actually makes that case – his conclusion is more that if employees are engaged in identifying their own goals and interests they have more buy-in to help the company.

I worked at a company once that was just over 10 years old and struggled in the area of providing fair performance reviews. I remember it clearly because it resulted in me leaving the company after being denied what I felt was fair compensation even after helping the company reach certification/partner goals, expanding their visibility through a successful (and ongoing) professional development event, and of course client work.

The reason I raise this is because the old adage “With age comes maturity and wisdom” is true. I now work at Online Business Systems, which has been around for 25+ years. Over that time, the company’s commitment to culture and the development of our People Care group has resulted in a fantastic model for individual development, transparent performance reviews, and corporate success. Let me walk you through our model.

Career Mentors and the Career Plan

Each Onliner is assigned a Career Mentor. These are people who have been with the company at least a year (although more senior the better) and who act as an advocate for the Onliner. The Career Mentor has a number of jobs, one of the most important being helping set the Onliner’s Career Plan.

The Career Plan is similar to Steve’s experiment. It’s about identifying where the Onliner wants to be as far as skills, knowledge, and exposure over the next year. We talk about what roles and what level of those roles they’re at and where they’d like to be (i.e. Intermediate Developer, wants to be a Senior Developer). We also discuss this in the context of what the company’s needs are. From that goals are set, and a plan to meet those goals is worked on. The plan is then reviewed with management to ensure that the individual’s goals fit into our corporate goals and any adjustments required are made.

Receiving Feedback

Feedback is not just a once-a-year thing. Feedback needs to be ongoing throughout the year, and reviewed throughout the year as well. The key here is that its up to the Onliner to approach people and request feedback; feedback is part of their personal development, they need to ensure its happening – and not just the good stuff, but constructive as well. This is also an area that the Career Mentor can help provide guidance and coaching on.

This feedback isn’t just tossed into a pile and brought up at review time. The Onliner’s Career Mentor must review it and post it within our system. This ensures someone has vetted it out, and the feedback has been discussed with the Onliner (Career Mentor’s are expected to meet with their group one-on-one every month). No feedback should ever be a surprise.

Review Time

When it’s review time, it’s the Career Mentor that compiles the feedback together and reviews that with the Onliner. At this time the previous year’s career plan is also reviewed – how’d they do? Did they meet their goals? Did they improve the way they planned? Did other things happen that deviated from the plan but were still beneficial? All of this gets discussed. Note that this is a Performance Review and not a Compensation Review. The compensation review is done between the Onliner and the Director/Manager that they fall under. Of course, the performance review and input from the Career Mentor are factors in the compensation meeting. We keep those discussions separate though.

What This System Addresses

This implementation allows us to address common issues plagued by many HR departments:

Timely Feedback

Timely, ongoing feedback that helps the Onliner when it’s submitted, not just at the end of the year at annual review time.

Performance Issues Dealt With/Performance Praise Handed Out

With an ongoing oversight, performance issues can be caught and dealt with much earlier. At the same time, excellence in performance can also be noted. We have a program called “XTreme Feats” where every quarter any Onliner can promote any other Onliner or team for their accomplishments. These Onliners are recognized in corporate announcements and receive thank-you gifts.

Clear and Understood Expectations for Goals and Performance

In addition to working well in their chosen discipline (developer, analyst, etc.), the Onliner’s career plan has an impact on their final review and compensation. What’s great is that there’s a clear, understood, and agreed upon plan. The Onliner knows what their goals are, and the company has agreed to both the goals and to support the Onliner in achieving them. The basis for compensation is clear in everyone’s mind.

There’s a saying that “there should be no surprises when it comes to your annual review”, and we do our best to ensure that is a true statement at Online.

So to answer Steve…

So to answer Steve’s question, what he talked about was what we would see as the role of the Career Mentor. Important and necessary, the output of a Career Mentor’s activities feed the performance and compensation reviews. At the same time, performance issues are addressed while performance excellence is identified and praised.

Feedback

I only have one thing i'd like to add, your company's career dev process has nothing to do with young company vs old company. If anything, I think a 25yr old company is LESS likely to have a progressive program like that actually. Point being, that's just a trait of a progressive company, has nothing to do with age == wisdom. Kudos for sure though to them for it.
12/23/2012 9:48 PM | Chris D

You're thinking of large publicly traded companies, where shareholder price trumps everything and professional development is an afterthought. With privately held companies, like the ones I've worked for over the last 10 years, experience and maturity have huge impacts. It's the difference between having a dedicated HR staff , rather than promoting the office admin assistant to an HR Director role because she took a few night classes. It's the difference between seeing Business Development (Sales) as a profession that brings value and committing to build a solid team, rather than relying on a single sales guy to drum up business. And it's the difference between seeing professional development as an investment in an employee who will provide greater value to the company, rather than seeing PD as too risky of an investment *if* the employee leaves and therefore should be avoided.

There's lots of companies that claim to be progressive, but unless you have the depth of wisdom and experience at the helm you could be stuck spinning your wheels in the name of "progression".
12/23/2012 10:09 PM | D'Arcy Lussier